Global Gaming Industry market: the results of 2022 and the main trends of the future

For the global gaming industry market, the past year has been a year of correction. According to the analytical company Newzoo, in 2022, the gaming market decreased by 4.3% to $184.4 billion. Analysts call this a short-term recession after a two-year pandemic boom and already give a positive forecast for the next 2023, and by 2025 they expect the market to reach $211.2 billion, increasing by an average of +3.4% per year.

DECELERATION PHASE

In the segment of browser—based computer games, the most noticeable reduction occurred – by 16.7% year-on-year. More and more users are switching to mobile games, and the rest spend less on average.

Ampere Analysis analysts attribute the 6.4% decrease in the mobile games sector to the update of the requirements for privacy settings, which made the established advertising and user engagement models inaccessible. A slight reduction in the console market is explained by problems with the production of equipment and the postponement of a number of releases to the next year. At the same time, the PC gaming sector experienced a short-term decline amid the closure of gaming cafes in Asia due to the pandemic, and then quickly returned to normal, but faced a flow of customers into the field of mobile games.

Meanwhile, Newzoo notes that the VR games market will generate revenue of $1.82 billion in 2022, which is 26.4% more than last year. The amount does not include the costs of VR equipment.

THE PROGNOSIS IS FAVORABLE

It is predicted that the growth of the games market will resume next year. Expectations are related to the optimization of console supply chains, the release of delayed games, and changes in advertising, which will again allow targeted user engagement. The trend of increasing the number of players is definitely positive — the number of gamers worldwide has exceeded the three billion mark. And this is great news for developers. More interest means more revenue, more studios, and more opportunities to create unique, exciting, and successful games.

TRENDS 2023

Analysts identify several main trends that will ensure the growth of the industry in the current year.

More and more developers are creating cross—platform or multiplatform solutions – games that can be played on multiple platforms. Such products no longer force users to choose between a console, PC, or mobile device, making games available anywhere.

This trend also meets the demand for the active development of social interaction between players. Now gamers can compete with each other or join communities regardless of location or chosen platform. And when developers also use cloud technologies, then the same user can use a PC or a console, or a mobile device for the game alternately, without losing their game progress.

Cross-platform allows developers to expand the player base and make the multiplayer mode more comfortable for players.

The American software company Perforce interviewed more than 300 industry professionals and came to the conclusion that in the near future streaming and cloud gaming will become the main way to play video games. In its report “Trends and Forecast of game development for 2022”, the company notes that consumers are adapting to cloud games, and, according to almost 40% of developers surveyed, by 2025 cloud solutions will become the dominant form of games, reaching more and more users.

Thanks to cloud games, the need for expensive hardware will fade into the background, which will open up a lot of opportunities for those who cannot afford a powerful PC. If we take into account the scale of 5G distribution and extremely high prices for video cards, cloud games have every chance of becoming mainstream.

The trend of switching to cloud technologies concerns both users and developers. Easily accessible specialized development tools and game engines, as well as the ability for developers to interact with players, have led to major changes in the production of games.

For most of the game creation industry, the local work of the development team was the standard until recently. Now many companies are turning to the cloud, and giants such as Amazon Web Services, Microsoft, and Google are investing heavily in making large-scale cloud development a reality.

The transition to cloud development is aimed at reducing the entry barrier for game creators by reducing initial costs. As the cloud development industry develops, more and more new studios are able to enter the market minimizing financial risks. This will stimulate innovation and is expected to benefit the gaming industry as a whole.

The esports market — especially mobile — is also gradually gaining momentum. Millions of esports fans gather to watch professional players play their favorite games. For the players themselves, video games have turned from a hobby into a professional career.

And this is no longer just a niche trend, it is expected that by 2030 the volume of the global esports market will reach $12.5 billion, and the cumulative annual growth rate (CAGR) will be 21.9% in the period from 2022 to 2030. The largest gaming companies Tencent, Riot Games, and Moonton Games are fighting for a place in the sun.

The rapid growth is due, among other things, to the growing popularity of streaming platforms such as Twitch and YouTube Gaming. The increase in the number of views and the number of fans created new opportunities for growth and led to increased investment. As more and more people become interested in esports, the industry will continue to grow.

In parallel, blockchain games continue to develop – metaverses with their own economy, allowing you to earn real money in the virtual world. One example is the “play to earn” games, in which users earn items that can be traded by playing. In 2021, EA CEO Andrew Wilson even called these games “the future of the industry.”

Many major studios, including Square Enix and Ubisoft, are already investing heavily in NFT, so it is very likely that other developers will soon show greater commercial interest.

According to the Blockchain Game Alliance’s annual report, in 2021, NFT games have transformed from a niche phenomenon into a large and growing part of the gaming and blockchain industry. The study, which involved 300 companies in 56 countries, showed that the industry’s revenue in the third quarter was $2.3 billion, which is about 22% of the total trading volume of NFT.

The gaming industry has shown its resilience in times of economic instability: the number of players continues to grow, user engagement remains high in all segments, games have penetrated deeply into people’s lives, and this will not change. In the near future, the games market will return to the growth phase.